Direct taxes and indirect taxes are two primary categories of taxation used by governments worldwide. Direct taxes are those levied directly on individuals or entities, such as income tax 💼, corporate tax 🏢, and property tax 🏡. These taxes are typically progressive, meaning higher earners pay a larger percentage of their income.

On the other hand, indirect taxes are imposed on goods and services rather than on individuals or companies directly. Examples include sales tax 🛒, value-added tax (VAT) 📈, and excise duty 🍷. Indirect taxes are often regressive, affecting lower-income groups more significantly since they spend a larger proportion of their earnings on taxed items.

Both types of taxes play crucial roles in funding public services like healthcare 🏥, education 📚, and infrastructure 🛣️. While direct taxes can help reduce income inequality, indirect taxes contribute to revenue generation across all societal levels. Understanding these tax systems helps citizens better manage their finances and advocate for fair fiscal policies. 🧮✨